Recently, a lot of technologies have gained extreme popularity. For instance, Artificial Intelligence, Machine Learning, Augmented Reality, Virtual Reality, and many others. One such technology that has today become the buzzword in the market in Blockchain. It has become quite popular in both the startup world as well as in the corporate space where big corporations like banks, insurance companies, and many others are implementing Blockchain for various solutions. In this blog, we will take a look at such use-cases.
Blockchain as a technology has been labeled as a revolutionary tech. It is the first decentralized data storage system that democratizes data access by eliminating middlemen. Due to the generic nature of the technology, it has wide applicability in a lot of areas across various industries and that has caught a lot of eyes.
The first well-known implementation of Blockchain, Bitcoin received a lot of attention from the market. Today, a lot of such cryptocurrencies have gained enormous popularity. People are investing a lot of money in purchasing them. In fact, high-frequency trading firms have started writing algorithms to trade cryptocurrencies.
Let us now briefly understand what Blockchain is. Then we will talk about some interesting use-cases of Blockchain in the industry.
Introduction to Blockchain
In simple terms, Blockchain is a data structure that allows storing data in a decentralized manner. It is quite similar to peer-to-peer architecture. The specialty of Blockchain is that it provides high data security as a virtue of the way it is implemented. In case you are interested in knowing the details of how Blockchain works, you can read this blog post on Blockchain Programming for beginners.
Benefits of Blockchain
Blockchain offers some key benefits:
- Eliminating middlemen: by decentralizing data storage, Blockchain helps in eliminating middlemen which eventually results in cost reduction. A classic example of this is cryptocurrency. Cryptocurrencies are not managed by any bank. There are no middlemen involved in say bitcoin transaction. The transactions happen in a fully peer-to-peer mode with no intermediaries.
- Trust: since there are no middlemen involved and every party can see the data in the Blockchain, it provides more trust between the participating parties. In a centralized architecture, all the parties have to trust the middlemen which lead to dependency on the same. For instance, when you use net banking, you have to trust your bank that they will send the funds to your friend whose transfer you have initiated. In the event that your bank defaults, you can’t really do anything.
- Availability: Blockchain follows a decentralized architecture and so, there is no single-point-of-failure in a Blockchain. As a result, it provides for higher availability as compared to centralized systems. In centralized systems, if the system goes down, the availability is completely lost for all the parties. As an example, if your bank’s core banking system goes down, you just cannot transact.
- Data Security: by implementing the hashing mechanism, Blockchain provides high data security. In the event that any party tries to mutilate the data in the Blockchain, the whole chain collapses.
Applications of Blockchains
Blockchain can be used in practically all those scenarios where middlemen are involved. Here are some of the interesting use-cases where Blockchain is currently being implemented:
- Cryptocurrency: this is the most well-known use of Blockchain. By implementing Blockchain, parties are able to transact with each other without the involvement of any bank. For instance, a person sitting in the United States can transfer bitcoins to one based out of India without intervention from any bank. This lead to the creation of a lot of cryptocurrencies, Bitcoin being the most popular one.
- Advertising & Real Estate: Currently, companies like Google and Facebook control almost all of the digital advertising traffic of the world. However, Blockchain can potentially eliminate that. Here, Google and Facebook are essentially middlemen that control the advertising ecosystem. Using Blockchain the producers and the consumers can be connected directly through a decentralized system. Just like in advertising, in the Real Estate industry, there are middlemen in the form of brokers who often charge exorbitant fees for pairing the buyer with the sellers. Using Blockchain, such middlemen can be eliminated to save the cost. Basically, instead of relying on centralized advertising/listing portals, a Blockchain can be used where the producers (advertisers or real-estate sellers) can provide their ads/listings and consumers can see them directly without any middlemen.
- Supply Chain: This is an interesting use-case. An international courier has to go through a lot of steps. For instance, it goes through the courier service provider (like DHL), then goes through customs of the sending country, then through customs of the receiving country and finally through the local courier service provider at the receiving country. The biggest issue in this supply chain is to track the status of the shipment. Companies are planning to implement Blockchain across these parties so that all the parties involved can put status in real-time in the Blockchain which customers can easily track. Using Blockchain eliminates the management onus on one party and helps in decentralizing the load across all the parties.
- Insurance: Insurance companies are partnering together to create a Blockchain that will contain data of people who have filed fraudulent insurance claims. This will help companies in verifying the genuineness of the applicant while issuing insurance. As an example, if an applicant A applies for an insurance at a company B, B can easily use the Blockchain to check if A has in the past filed fraudulent claims at some company C. In case that has happened, B can decide not to issue insurance to A since A may again file a fraudulent claim at B. The best part about this system is that no single insurance company has to take the responsibility of maintaining this data. The data is decentralized across the companies which establishes a lot of trust across the companies. Just like the insurance sector, the same logic can also be applied to banking where the banks are working on creating a data of defaulters. Currently, this is done by credit rating agencies. Banks are trying to eliminate these credit rating agencies by using Blockchain where they will all share the data of defaulters in a secure manner.
- Healthcare: The health records of patients can be securely stored in a Blockchain so that when the patient visits another doctor, he/she can directly share those records with the new doctor. The best part about using Blockchain here is that there is no need for a centralized portal where these records are stored. Therefore, the cost can be lowered significantly. Health records could include a lot of things like:
- Diagnostic by doctor
- Medical History
- Lab reports
Blockchain as a technology is quite powerful and has the potential of being applicable in a large number of use-cases. As a result, a lot of startups are also coming up in the Blockchain space where they are providing Blockchain solutions to enterprises like Banks, Insurance companies, Supply Chain companies, Asset Management companies, and many others. In fact, some startups are using a combination of multiple technologies to provide scalable solutions. For instance, some startups are using Blockchain with Artificial Intelligence. Others are employing Blockchain with the Internet of Things (IoT). The technology has the potential of revolutionizing the future. The challenge, however, will remain in the adoption of this technology by large corporates.
Does Blockchain excite you? Here are the best Blockchain Programming tutorials recommended by the programming community